SAN JOSE -- Critics of California environmental law called a labor group's legal challenge to a downtown San Jose high-rise an example of "greenmail" abuse in which unions threaten builders with bogus claims to control hiring.

The San Jose City Council voted 9-2 Tuesday to reject environmental approval appeals brought by the Santa Clara & San Benito Counties Building and Construction Trades Council over the 23-story One South Market project.

"I think this is just an abuse of the environmental process," Mayor Chuck Reed said.

Council members Ash Kalra and Xavier Campos opposed denying the appeals, arguing they raised real concerns, such as not doing enough to ensure traffic mitigation.

Kevin Dayton, president of Roseville consulting firm Labor Issues Solutions, called it a textbook case of unions using claims under the California Environmental Quality Act to pressure builders into hiring their workers.

"We call it greenmail," Dayton said. "Some people call it environmental permit extortion. They're looking for a developer to come to an agreement to use unions."

Neil Struthers, the building trades council's chief executive, acknowledged concerns that the builder "contracted with several major subcontractors from Sacramento that undermine the wage standard and qualifications of local craftsmen here in the South Bay." But Struthers said the environmental concerns are legitimate.

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Struthers said the developer is "underpaying their affordable housing fee, not following their transportation mitigation and not seeking the proper permits from the Regional Water Quality Control Board."

"What we are opposed to is this developer generating more profits at the expense of local workers," Struthers said, "and the environment."

Laurel Prevetti, the city's deputy director of planning, refuted the building trades council's claims and said the city properly granted environmental approval.

Mark Tersini, senior vice president of developer KT Properties, told the council the project will have 70 percent union construction.

It was the second time Tuesday that the council overrode environmental concerns brought by an interest group. The council also modified airport development height limits to accommodate a private airfield development over objections from a lawyer for the unsuccessful project bidder arguing the ordinance change violated environmental law. City officials argued the change was a mere "cleanup" action making limits consistent.

Former Gov. Ronald Reagan signed the original California Environmental Quality Act into law in 1970. It requires public agencies to mitigate or avoid significant effects on the environment from projects whenever feasible.

But business groups and other critics argue that too often special interests use the law to hold up projects for personal gain where there are seemingly few environmental concerns. Examples include businesses blocking competitors with CEQA lawsuits over urban infill development.

State Sen. Darrell Steinberg has a pending bill calling for modest streamlining of environmental approval for certain urban projects near transit stops, but groups representing local government say it doesn't go far enough.

"I hope state lawmakers look at these," Councilman Johnny Khamis said of the votes dismissing environmental challenges, "and see how CEQA is being abused."